Note H - Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

H. Commitments and Contingencies

Legal Matters

From time to time, the Company is involved in various legal proceedings arising in the normal course of business. For some matters, a liability is

not

probable, or the amount cannot be reasonably estimated and, therefore, an accrual has

not

been made. However, for such matters when it is probable that the Company has incurred a liability and can reasonably estimate the amount, the Company accrues and discloses such estimates. As of

December 31, 2019

and

2018

,

no

accruals have been made related to commitments and contingencies

.

Lease Agreements

We have operating and finance leases for office space, laboratory facilities and various laboratory equipment, furniture and office equipment and leasehold improvements. Our leases have remaining lease terms of

1

year to

6

years, some of which include options to extend the leases for up to

5

years, and some which include options to terminate the leases within

1

year.

Florida

The Company leases office space in Florida, comprised of

two

contiguous office suites, under

non-cancelable operating leases, which

expire in 

August 2025

and

February 2026,

as to each space respectively, and include the right to extend the term of the leases for

two

successive

five

-year terms upon expiration. In February

2020,

the Company agreed to sublease office space in Florida, comprised of

one

of the

two

contiguous suites, under a non-cancelable operating lease, which expires in February

2026.

Iowa

The Company leases office and laboratory facilities in Iowa under a non-cancelable operating lease. The Company’s lease for its Iowa facilities expires in

September 2020 

and includes a renewal option that could extend the lease for successive

one

-year terms upon expiration.

Virginia

The Company leases office and

laboratory facilities in Virginia under a non-cancelable operating lease.

The Company’s lease for its Virginia facilities expires in

August 2020.

North Carolina

The Company leased office space in North Carolina under a non-cancelable operating lease. The original expiration date of the Company

’s lease was

May 2020

.

During the

second

quarter of

2017

, the Company subleased its office space in North Carolina under a non-cancelable operating lease to a

third

-party tenant. The sublease term with the

third

-party runs concurrent with the lease term the Company has with the landlord. In October

2019,

the Company terminated the head lease with the landlord and the sublease with the subtenant so that the landlord and subtenant could enter directly into a lease.

Capital Lease

The Company leases various laboratory equipment, furniture and office equipment and leasehold improvements that are accounted for as capital leases and that require ongoing payments, including interest expense. The capital leases

are financed through various financial institutions and are collateralized by the underlying assets. As of

December 31, 2019

and

2018

,

the interest rates for assets under remaining capital leases range from

7.19

%

 to

9.57

%.

The components of lease expense were as follows (in thousands):

	Year Ended December 31,
Lease Cost	2019
Finance lease cost:
Amortization of right-of-use assets	$	123
Interest on lease liabilities		40
Total finance lease cost		163
Operating lease cost		473
Short-term lease cost		232
Variable lease cost		48
Less: sublease income		(84	)
Total lease costs	$	832

Rent expense for non-cancelable operating leases was

$

0.7

million for the year ended

December 31, 2019

and

2018

.

Supplemental cash flow information related to leases was as follows (in thousands):

	Year Ended December 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	40
Financing cash flows from finance leases		207
Operating cash flows from operating leases		435
Operating cash flows from short-term leases		232
Operating cash flows from variable lease costs		48
Right-of-use assets obtained in exchange for lease liabilities:
Finance leases	$	757
Operating leases		1,852

Supplemental balance sheet information related to leases was as follows (in thousands, except weighted average remaining lease term and weighted average discount rate):

	December 31,
	2019
Finance Leases
Property and equipment, at cost	$	1,013
less: accumulated depreciation and amortization		(398	)
Property and equipment, net	$	615
Other current liabilities	$	236
Other long-term liabilities		168
Total finance lease liabilities	$	404
Operating Leases
Operating lease right-of-use assets	$	1,537
Total operating lease right-of-use assets	$	1,537
Current portion of operating lease liabilities	$	284
Operating lease liabilities, less current portion		1,901
Total operating lease liabilities	$	2,185
Weighted Average Remaining Lease Term
Finance leases	2 years
Operating leases	6 years
Weighted Average Discount Rate
Finance leases		7.7	%
Operating leases		7.5	%

Maturities on lease liabilities were as follows (in thousands):

	Finance			Operating
Year Ending December 31,	Leases			Leases
2020	$	260		$	438
2021		163			449
2022		11			461
2023		-			472
2024		-			484
Thereafter		-			420
Total lease payments		434			2,724
Less: future interest expense		(30	)		(539	)
Lease liabilities	$	404		$	2,185